Berkshire News Briefs - 7/28/13

HomeServices Lending Announces Plans to Become Wholly-Owned Subsidiary of HomeServices of America (HomeServices Blog)

HomeServices Lending LLC, a joint venture with Wells Fargo, today announced plans to transition to become a wholly-owned subsidiary of HomeServices of America, a Berkshire Hathaway affiliate. The transition work has been underway for some time, and is expected to conclude in 2014.

Berkshire Allowed to Count BNSF Purchase Costs in Rail Rates (Bloomberg Businessweek)

Warren Buffett’s Berkshire Hathaway Inc. (A:US) can count the $8.1 billion premium it paid to acquire Burlington Northern Santa Fe Corp. in the formula used to calculate prices for some shippers, a decision that may make it harder for some rail customers to challenge their rates. The U.S. Surface Transportation Board, which regulates some rail rates, today ruled that Berkshire may count the premium from its 2009 purchase of BNSF by spreading those costs over seven years. Shippers moving products, including coal, asked the regulator to prohibit the company from counting the premium in its cost base, saying Berkshire was unfairly trying to make them reimburse its expenses in the $26.5 billion BNSF acquisition.

Why Warren Buffett's Berkshire Hathaway pulled out of India (Economic Times)

India has long been viewed as a value investor's dream: rapid growth, 1.2 billion people pining for a taste of globalisation, and underdeveloped industries ripe for turnarounds. So it surprised few when the genre's guru, Warren Buffett, placed a bet on the world's ninth-biggest economy. What did come as a surprise was last week's decision by the billionaire's Berkshire Hathaway to give up on India's insurance market after just two years. [...] Buffett isn't alone. Walmart, ArcelorMittal and Posco are pulling back on investments that they had announced with great fanfare. What's scaring foreigners away? A rampant political dysfunction that has stopped India's progress cold.

Buffett Reinsures Irish State Health Claims as Population Ages (Bloomberg Businessweek)

Warren Buffett’s Berkshire Hathaway Inc. will reinsure about 700 million euros ($923 million) in claims for Ireland’s state health insurer, which is seeking to stem losses and its burden on taxpayers as the population ages. Vhi Healthcare and Omaha, Nebraska-based Berkshire signed a deal for one year, which Vhi will seek to extend, Brighid Smyth, a spokeswoman for the Dublin-based insurer, said by phone. She declined to give terms of the agreement, which will cover half of Vhi’s 1.4 billion-euro claim book. The agreement may save Irish taxpayers as much as 90 million euros, Smyth said, as Vhi will require a smaller boost to its reserves given Berkshire’s assumption of some of the insurer’s risks.

Around the Water Cooler With Dairy Queen’s CEO (US News & World Report)

[John] Gainor, 56, started at International Dairy Queen, Inc. as the chief supply chain officer and became the CEO five years ago. He now oversees more than 6,300 restaurants worldwide, with more than 4,500 in the United States. Since Dairy Queen is a wholly owned subsidiary of Warren Buffett's Berkshire Hathaway Inc., the company isn't directly in charge of the several hundred thousand employees. But that doesn't mean Gainor misses an opportunity to converse with the Blizzard techs pumping soft serve behind the counter.

Buffett’s PacifiCorp Agrees to 160-Megawatt Wind Deal With Apex (Bloomberg)

PacifiCorp, a utility unit of Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), agreed to buy power from a wind farm that Apex Clean Energy Inc. plans to build in Utah. PacifiCorp will buy the output from closely held Apex’s $230 million Long Ridge wind farm, which will consist of two 80-megawatt projects and is expected to produce enough electricity for about 43,000 average U.S. homes [...]

Berkshire Hathaway derided for ‘foolish’ Aon deal (Financial Times)

Warren Buffett’s Berkshire Hathaway has been branded “foolish” by a leading insurance executive for blindly following underwriting decisions taken by Lloyd’s of London rivals. An unusual deal that Berkshire has struck with the insurance broker Aon is likely to “end in tears”, warned Richard Brindle, founder and chief executive of FTSE 250-listed specialist insurer Lancashire. Lloyd’s officials have already complained that the arrangement – under which Aon has begun to automatically allocate a chunk of all business it places at the historic market to Berkshire – threatens to undermine underwriting expertise.

Warren Buffett joins ceremony at Carmel Geico service center (Indianapolis Star)

Two American business icons made an appearance Monday at the ribbon-cutting for GEICO’s customer service center in Carmel. One was a big green gecko. The other was billionaire Warren Buffett. GEICO announced March 18 that it would open a service center at 101 W. 103rd St. and bring 1,200 new jobs to the city. [...] Berkshire Hathaway owns agricultural systems manufacturer CTB International Corp. in Milford, liability insurance provider Medical Protective Co. in Fort Wayne and RV manufacturer Forest River Inc. in Elkhart. Buffett also donated money toward the $26 million redevelopment of the historic Meadows neighborhood on the Northeastside in 2011. “Obviously, we like Indiana,” Buffett said to a group of reporters at the ceremony.

Dow Says ‘Rest Assured’ on Effort to Redeem Buffett Stake (Bloomberg)

Dow Chemical Co. said its prospects have improved for redeeming $4 billion in preferred stock held by Warren Buffett’s Berkshire Hathaway Inc.and Kuwait’s sovereign wealth fund after interest rates climbed. [...] Midland, Michigan-based Dow pays an 8.5 percent annual dividend on preferred shares it sold to help fund the 2009 purchase of Rohm & Haas Co. Redeeming those is a “top priority for us,” Weideman said. “As we’ve said all along, timing’s important on this.”

5 Reasons Why the Bears Are Wrong About Berkshire Hathaway (Fool Blog)

On May 13, Michael Price of MFP Investors gave a slide presentation at London Value Conference arguing that the fair value of Berkshire Hathaway's stock should be roughly 20% lower than it is today. So are the bears right about Berkshire? Here's five reasons why I believe the answer is an emphatic “No.”

Real Money Stock Pick: Berkshire Hathaway (Fool Video)

As I [Andrew Tonner] add a few companies this week to the defensive value investing portfolio that I manage for the Fool, the theme of this specific purchase could be "invest with the best." Of course, I'm talking about Berkshire Hathaway, which to me perfectly embodies the conservative, outstanding companies I prefer to own.

Candy date with Warren Buffett up for auction (CBS News)

Now one lucky bidder can spend the day picking the brains of the fourth richest man in the world. The magnate is putting himself on the auction block Thursday to benefit Communities in Schools of Los Angeles (CIS), a charity that focuses on keeping kids in school. [...] The winner of the auction will win an "all-you-can-eat" tour of the See's Candy factory in Los Angeles, where Buffet will demonstrate "the only acceptable way to eat a bonbon." Currently, the highest offer is at $18,000 with two bids since launching.